Apple investors rode a profitable wave in 2021 as AAPL stock returned nearly 36% in gains for the year. Some of those gains are tied to anticipation for 2022 and rumors that Apple is getting closer to releasing its AR and VR headset. In addition, Apple’s total dividend yield is higher than most people believe. For The Motley Fool, Bradley Guichard takes a closer look at what Apple might be up to and why the stock has so much potential in 2022.
Bradley Guichard for The Motley Fool:
Apple pays investors a relatively small dividend which currently stands at $0.22 per share per quarter. The dividend has been raised for each of the past nine years. While the yield is just 0.5%, much of the reason for that is the big runup in the stock price depressing any yield. That’s actually a good thing.
Apple has found other ways to return its excess capital to shareholders. In early 2021, Apple authorized its stock buyback program to increase from $225 billion to $315 billion. Buybacks can boost the stock price by lowering the available shares on the market, making each more valuable.
In fiscal 2021 alone, the company returned $85.5 billion to shareholders by repurchasing stock. This amounts to nearly 3% of the current market cap. When combined with the dividend, the yield looks much more attractive.
Because of buybacks, the number of average quarterly diluted shares outstanding has dropped 22% over the past five years. Another advantage is that share buybacks are tax-deferred for investors. The buybacks, combined with the increasing dividend, make Apple’s yield quite attractive for long-term investors.
MacDailyNews Take: If 2022 is anything like 2021 was for Apple stock, shareholders will be having a very happy new year, indeed. In the last year, Apple’s stock price has increased from a low of $116.21 to hit an all-time high of $182.94 (January 4, 2022).
Apple’s board of directors normally declares the cash dividend figure at the end of April with the company’s release of fiscal 2021 second quarter (January-March) results.
Please help support MacDailyNews. Click or tap here to support our independent tech blog. Thank you!
“Because of buybacks, the number of average quarterly diluted shares outstanding has dropped 22% over the past five years. Another advantage is that share buybacks are tax-deferred for investors.”
MDN re-posting what some believe to be controversial: share buybacks. Apple has repurchased 22% of shares in 5 years. But, to some, this is not a return to investors and the buybacks don’t have a real effect on stock price.
Let’s put 22% more shares on the market and see what happens shall we? Ahhhh, NO! Let’s not.